US authorities have charged 18 individuals and entities in a sweeping crackdown on cryptocurrency fraud. FBI even created own token in a massive undercover operation.
The charges, unsealed in Boston, target leaders of four crypto companies and four crypto financial services firms. Prosecutors allege widespread market manipulation and "wash trading" schemes.
Four defendants have already pleaded guilty. Three others were arrested this week in Texas, the UK, and Portugal. Authorities have seized over $25 million in cryptocurrency and disabled multiple trading bots.
The alleged schemes involved creating sham trades to artificially inflate token prices. This "pump and dump" tactic lured in unwitting investors. One company, Saitama, briefly reached a multi-billion dollar market value. Crypto firms allegedly hired market makers to conduct wash trades, which created the illusion of genuine market activity. One defendant described the goal as finding "other buyers from the community, people you don't know about or don't care about."
The charges span multiple nationalities. Aleksei Andriunin, a 26-year-old Russian arrested in Portugal, allegedly ran market maker Gotbit. British-Hong Kong national Riqui Liu, 26, worked for ZM Quant. Andrey Zhorzhes of the UAE represented CLS Global.
Saitama, a Massachusetts-incorporated crypto company, faces significant allegations. Its British CEO Manpreet Kohli, 43, was arrested in the UK. Vietnamese national Nam Tran, 32, is also charged but remains at large.
US Attorney Joshua Levy called it "a stark reminder of how vigilant online investors must be." He warned that combining "innovative technology" with old-school pump-and-dump schemes remains fraud. The FBI took an unprecedented step in the investigation, creating their own cryptocurrency token and company to identify fraudsters. FBI Special Agent Jodi Cohen described it as "a new twist to old-school financial crime."
Charges include wire fraud, market manipulation, and conspiracy. Maximum sentences range from 5 to 20 years in prison. Fines could reach $5 million or twice the gross gain or loss from the offense.
The SEC has filed parallel civil complaints against several defendants. The case involved international cooperation, including assistance from law enforcement in Portugal and the UK.